How is the Eurozone Going to Recover?

The Eurozone refers to a coalition of countries who have accepted the same currency in the interests of a better economy. However, the growth slowed to a crawl in the second quarter, the lowest in 2 years at 0.3%. By the third quarter, the Brexit vote resulted in no improvement of this situation either. This is the reason that in the 4th quarter, calls have been put forth to various participants for economic stimulus. Leading the charge is European Central Bank (ECB) president, Mario Draghni who has called on policy makers at the continental level to step forth and help with the traction. As he has outlined, any measure is okay as long as it complies with the EU regulations in order to see the economy take off. While Draghni is looking on implementing policies for the stabilization of the monetary rate at 0.00%, many banks have already started trying out negative rates. As experts have claimed that this can actually result in a more harm coming in the future than it is worth.

The Political Situation

This is all the more pronounced looking at the political upheaval which is wreaking havoc throughout the member nations of the Eurozone as well. Spain is looking at an extended political deadlock, which continues resisting various implementations which are being tried for its resolution. In fact, the country is looking at its 3rd consecutive general elections within the year. Italy, on the other hand, faces a different kind of problem. Coming 4th of December will be a judgment day which sees Prime Minister MatteoRenzi trying to implement a few new reforms. He has emphatically stated that he will resign should it fail. Other equally important players like Germany and France are also facing tough elections in the recent future, which means that the whole instability can rise up to new heights should new political parties come to the forefront.

Brexit

The whole Brexit fiasco and subsequent appointment of the new Prime Minister, Theresa May has been worth a lot of trouble to the Eurozone. Besides losing a key player in the continent, the Brexit vote meant that investors lost confidence in a new economic situation. While common reasons for Brexit and its subsequent advantages have been cited by the UK as having better trade sanctions and flexibility and internal policy freedoms, the truth is far from it. In fact, as can be seen from the fall of value for the GBP against USD, Britain is now plagued by a rapidly losing battle of the economy. The worst hit by this news are the common people, who are getting a lot less of their money’s worth during the festive season for travel. The problem for Eurozone because of this is the pressure. If any more participants from the Eurozone decide to break away from the coalition, experts have estimated that the price of Euro could be irreparably damaged to below the 1:1 parity with USD. However, this is a stark turnabout from Putin’s stance on it wherein he says that a smaller but more focused community for the Eurozone will benefit the whole economy.

Inflation

As was predicted, there was an inflation of 0.2% observed in August. ECB president Draghni defended the low rates and irrational Oil and Gold prices by stating that 1.0% is the danger zone. This has led to investors and analysts wondering if they are finally going to stoke the prices openly to create a more buoyant economy. While the ECB has currently let its monetary policies remain unchanged, experts on the issue agree that the inflation is likely to continue and will hit the 1.3% rate in the near future. Why not check out the mini hedge fund over at Trusted Binary Reviews right here for some top investment strategies.